Thursday, January 13, 2005

Given the new year and turbulent changes already announced in 2005 (e.g. Delta's fare simplification), I thought it would be a good time to publish my top ten 10 predictions for 2005 in the world of travel technology:
1) GDS bypass becomes a viable option - Multiple travel conferences this year have alternate GDS players front and center. I believe that 2005 will see the first sign of real GDS bypass with at least one major carrier moving to an alternate GDS platform
2) Dynamic Packaging functionality improves and grows - As I reported in my published report on Dynamic Packaging (see traveltechnology.com for more details) Dynamic Packaging interfaces are at an infancy. Look to 2005 for increased use of personalization and other CRM techniques to enhance the customer value of dynamic packages. Customers will also be able to redeem miles as part of dynamic packaging product in 2005
3) Wireless travel applications become a reality - With the consolidation of the telecom sector and the growth of 3G networks, travel applications will be promoted by suppliers as a way to provide a "virtual concierge" for their best clients. These apps will likely be take the form of branded content published to the frequent traveler based on their location and permission (opt-in)
4) Online Travel Agencies (OTAs) will continue to expand globally through acquisition of regional agencies. This will include Expedia Corporate Travel buying key assets in Europe
5) Fare restructuring leads to the elimination of many corporate discount programs. The traditional carriers will look long and hard at all corporate agreements and cancel those that have not performed and where corporate volume is not sufficient to warrant a discount. Corporate buyers must embrace systems that allow them to control how their purchases are distributed (different GDS, alternate GDS, direct connect) to regain leverage with air suppliers
6) Second tier travel management firms (TMCs) will continue to find it hard to compete against the mega-agencies and ITMCs. Unless these TMCs embrace new technology platforms their long term survival is in jeopardy
7) The buzz around meta-Web search will begin to fizzle. There are two critical problems with meta-search. (1) the inability for the supplier reservations systems to withstand the hits from major portals such as Yahoo! or AOL. (2) The business relationships may not be in place to capture total content (e.g. low cost carriers (LCCs) such as Southwest). Without total content and the ability to manage capacity, meta search version 1.0 may prove to be more hype than substance. I do believe that meta-search does have value but must be done using a different architecture that reduces the strain on the supplier reservation systems.
8) Online travel takes off in Europe. The growth of online travel in Europe will be significant impacting all sectors of the industry including corporate travel.
9) The corporate travel industry will see further movement towards an integrated online solution rather than a stand alone booking tool. Independent corporate tool providers will partner with fulfillment services to provide an integrated solution to the corporate market and compete with the ITMCs
10) Weblogs will start to have an impact on the travel industry. Currently, the industry depends on news via media outlets (BTN, Travel Weekly) or research firms (PhoCusWright, Forrester). These organizations will continue to provide essential market sizing and analysis, but Weblogs will begin to play a role in how information is disseminated throughout the industry

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